Vietnam signs free trade agreement with EFTA countries

Vietnam signed a free trade agreement with European Free Trade Association members Norway, Switzerland, Iceland, and Liechtenstein in Hanoi on October 18, 2026. The deal eliminates or reduces duties on industrial, agricultural, and fish products, with over 98% of Norwegian exports becoming tariff-free within seven years. Prompted by United States tariff pressures, the pact aims to diversify commercial ties, strengthen strategic autonomy, and integrate Vietnam into higher-value-added global value chains.

Signing of the Free trade agreement

• ▪Vietnam's top leader To Lam and representatives of European Free Trade Association governments attended the signing ceremony for the Vietnam-EFTA free trade agreement in Hanoi on October 18, 2026
• ▪Vietnam and four European Free Trade Association member nations—Iceland, Liechtenstein, Norway, and Switzerland—signed a free trade agreement in Hanoi on October 18, 2026

Tariff reductions and trade terms

• ▪The Vietnam-EFTA free trade agreement encompasses provisions on trade in goods and services, intellectual property rights, trade remedies, and sustainable development across signatory nations
• ▪The Vietnam-EFTA free trade agreement eliminates or reduces customs duties on industrial, fish, and agricultural product imports between Vietnam and European Free Trade Association members
• ▪According to the Norwegian government, around half of Norway's exports to Vietnam will become tariff-free immediately upon the Vietnam-EFTA free trade agreement's entry into force, reaching over 98% duty-free within seven years

Bilateral trade volume and goods exchanged

• ▪Vietnam primarily exports machinery, footwear, apparel, textiles, and electronics to EFTA countries, while importing industrial machinery, pharmaceuticals, chemicals, and production raw materials
• ▪Bilateral trade between Vietnam and European Free Trade Association members reached 4.8 billion euros ($5.4 billion) in 2025 according to EFTA, while Vietnam's trade ministry reported an annual average of $2 billion

Strategic goals and economic impact

• ▪Scholar Do Dinh Lam Khang noted that closer ties with European Free Trade Association economies support Vietnam's ambition to move into higher-value-added activities and integrate deeper into global value chains
• ▪History and politics scholar Do Dinh Lam Khang stated that the Vietnam-EFTA pact represents a joint effort to build strategic autonomy and lessen dependence on dominant trading partners like the United States
• ▪The Vietnamese government announced that the Vietnam-EFTA free trade agreement seeks to diversify its import and export markets while reinforcing the rules-based trading system amid global economic volatility

Global economic and trade pressures

• ▪Vietnam faced significant tariff levies on its exports to the United States while continuing trade negotiations with Washington prior to signing the October 18, 2026 EFTA agreement
• ▪Global trade disruptions and tariff pressures from the United States under President Donald Trump prompted Vietnam and European Free Trade Association members to finalize their trade agreement